SURFSTITCH SHARE FLOAT PITCHED AT $214M

ONLINE surfwear retailer SurfStitch has launched its long-awaited share float which values the company at $214 million.

The company has issued a prospectus for the initial public offer which prices SurfStitch shares at $1 each.

SurfStitch is offering 83.2 million shares to the public, or 33 per cent of the company’s shares on issue.

The retail offer opens on December 8 and closes on December 12, with SurfStitch set to start trading on the ASX on a deferred-settlement basis on December 16.

The company, founded by Justin Cameron and Lex Pedersen in 2007 on Sydney’s Northern Beaches, will remain headquartered at Burleigh Heads as it continues its global expansion plans.

The float comes four months after the founders bought back the majority stake in the company from Billabong (ASX: BBG), along with Billabong’s Swell online business in the US.

SurfStitch is forecasting revenue of $199.1 million in FY15, up from $153.7 million last financial year.

This is expected to deliver gross profit of $89.7 million, up from $67 million.

SurfStitch is also expected to post its first profit since FY12 this financial year, a slim $100,000, although EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to surge to $5.1 million compared to a $3 million loss in FY14.

SurfStitch is described as “the only major pure play online action sports retailer in Australia and New Zealand”.

The company has established a strong presence in Europe and the US, aided by its recent acquisition of Surfdome in the UK.

The company has 271 staff and offers more than 700 brands and 30,000 products to more than 125 countries through its online portal.

SurfStitch.com has “consistently ranked in the top 10 most visited apparel and accessories websites in Australia”, says the company.

Chairmain Howard McDonald says the company has grown from an eBay-based business to become 
“a leading pure play retail e-commerce business globally”.

“SurfStitch’s ability to grow its brand and product portfolio and to move into new markets is greatly enhanced by the scale of its back-end infrastructure,” he says.

“With established warehousing and technology infrastructure in Australia, France and the USA, SurfStitch has the excess capacity needed to handle increased volume with minimal further investment.

“SurfStitch’s growth over the past seven years has been driven by a number of factors, including the growth of online retailing, which has seen many consumers make their purchases via e-Commerce websites rather than from traditional bricks and mortar retailers.

“In recent times, acquisitions have also played an important role in SurfStitch’s growth strategy.”

?SurfStitch founders Justin Cameron and Lex Pederson pictured.